Healthcare Truths Buyer Beware Peter Hayes May, 25, 2016 1 - PowerPoint PPT Presentation

Healthcare Truths Buyer Beware Peter Hayes May, 25, 2016 1

Healthcare Landscape 2

Healthcare Landscape United States: $3.2 Trillion 17.1% GDP $10,000 per capita World (OECD median ): <11% GDP <$4,000 per capita 3

Healthcare Landscape 4

Healthcare Landscape 5

Healthcare Landscape 6

Healthcare Landscape 7

Healthcare Landscape 8

Healthcare Landscape World Health Organization Ranking of the Worlds Health Systems http://thepatientfactor.com/canadian-health-care-information/world- health-organizations-ranking-of-the-worlds-health-systems #1 France #2 Italy #36 Costa Rica #37 United States #38 Slovenia

Starting Premise “ We c can ’ t solve p problems by by using t the same kind o d of thinking w we used w when we created them. ” – Albert Einstein

Healthcare Landscape Not About  Discounts  Admin Fees  Premium Costs  Health Promotion  Disease Management  Exchanges  High Deductible Plans  Obamacare 11

Healthcare Landscape About  Patient Engagement  Consumerism  Patient Advocacy  Patient Safety  High Quality Cost Effective Care  Transparency  Patient Decision Support 12

Healthcare Landscape 13

Healthcare Landscape Jaws of Doom 14

Healthcare Landscape Jaws of Doom Source: Kaiser Family Foundation analysis of Truven Health Analytics MarketScan Commercial Claims and Encounters Database, 2004-2014; Bureau of Labor Statistics, Seasonally Adjusted Data from the Current Employment Statistics Survey, 2004-2014 (April to April). 15

Healthcare Landscape Jaws of Doom 16

Healthcare Truths Buyer Beware 17

The Good, Bad ,and Ugly The Good One can get exceptional care The Bad The majority do not The Ugly Medical errors kill 1,100 per day 50% defect rate 30% medical procedures unnecessary 18

Healthcare Gap Analysis 19

PERSPECTIVES GAP ANALYSIS  Low Quality  High Cost (inefficient)  Perverse Incentives  Access and Affordability  Lack of a Culture of Health  Little Accountability  Sick Care System not a Health Care System 20

Perspectives Gap Analysis Quality-Report Card  Healthgrades Rated 4500 Hospitals on Clinical Quality for 18 Procedures  262 Hospitals (5.6%) Awarded Clinical Excellence  Mortality Rate 30.9% Lower  Would Save the Lives of 164,000 Medicare Patients  States Ranged From 0% to 30% of Hospitals being Clinically Excellent Source: Healthcare IT News (1/16/13) 21

Perspectives Gap Analysis Quality-Report Card Dallas, Texas 46 Hospitals 43% 20 Hospitals with an A Safety Rating 30% 14 Hospitals with a B Safety Rating 27% 12 Hospitals with a C Safety rating 22

Perspectives Quality Economic Impact of Preventable Medical Errors Nearly $1 Trillion $3,000 per person According to a study from researchers at Wolters Kluwer’s Journal of Health Care Finance , preventable medical errors may cost the U.S. economy up to $1 trillion in “lost human potential and contributions.” The study’s authors used Quality-Adjusted Life Years (QALYs) to develop, what they say, is a “more complete accounting of the economic impact when someone dies from a preventable error.” 23

Hospital medical errors now the third leading cause of death in the U.S. Medical errors leading to patient death are much higher than previously thought, and may be as high as 400,000 deaths a year, according to a new study in the Journal of Patient Safety. 24

Perspectives Gap Analysis Transparency - Matters  Rankings by Health Care Incentives Improvement Institute and Catalyst for Payment Reform (2015 Report)  45 States get a F  2 States get a C (Vt. and Va.)  2 States get a B (Me. and Co.)  1 State gets an A (NH) 25

Strategic Levers 26

Health Care Waste  $750 billion annually  30% of all procedures  Common unnecessary services:  Heart  Prostate and breast cancer screenings*  Imaging  Back surgeries  Knee procedures  Antibiotics  Preventable medical errors  Preventable infections  Unwarranted variation in quality and cost * Article New York Times 2/11/14 “Vast Study Cast Doubts on Value of Mammograms 27

In healthcare, higher prices do not translate to higher quality • Employees often assume higher Higher Adherence to Quality Standards price points mean higher quality • We consistently find a 10-30% savings 50 th opportunity by comparing paid %ile claims to the median cost • Savings does not depend on utilization or change in plan design Lower Cost Source: Regence Blue Shield of Washington (based on 41 MM claims data)

Price variation in-netw ork Cost variation by service – single health plan in one geography Price Variance Service Price Range Min Max 7 x Colonoscopy $563 $3,967 Primary care 3 x $85 $270 (first visit, adult) X-Ray of spine 4 x $38 $162 (3 images) 5 x EKG $27 $143 | 29

Keys to Health Care Right Care 50% is not 30% procedures are unnecessary Right Place 40% difference in mortality between health facilities Right Price Prices for services can vary by 300% 30

Could Diabetes Bankrupt the System  40% of current spend (direct and indirect)  8% current population are diabetic  20% are pre-diabetic  2% are compliant  Pre-diabetic costs 32% more ($900/yr)  Diabetic without complications costs 64% more ($1,800)  Diabetic with complications costs 6x as much ($15,000 )  Diabetes Prevalence Increased 45% last 20 years

Strategic Levers  Quality and Pricing Transparency Tools  Value Based Purchasing  Providers of Excellence Primary Care Specialists  Centers of Excellence Cancer Cardiac Joint Replacements Backs  Patient Advocacy 32

Portland Press Herald Global Opportunities HEART BYPASS UNITED STATES : $70,000 to $133,000 INDIA : $7,000 THAILAND : $22,000 SINGAPORE : $16,300 MALAYSIA : $12,000 HIP REPLACEMENT UNITED STATES : $33,000-57,000 INDIA : $10,200 THAILAND : $12,700 SINGAPORE : $12,000 MALAYSIA : $7,500 FACE-LIFT UNITED STATES : $10,500-$16,000 INDIA : $4,800 THAILAND : $5,000 SINGAPORE : $7,500 MALAYSIA : $6,400 Source: Portland Press Herald: March 2008

Healthcare Landscape-Cost Drivers Cost Driver Opportunity Proven Benefit Value Based Design Strategy Design Example Unnecessary $$$ Yes Providers of Care Excellence Preventable $$ Yes Providers of Medical Errors Excellence Unwarranted $$ Yes Transparency Price Variation Tools Patient $ Yes Incentives and Compliance Coaching Health Promotion $$ No Unproven 34

Strategic Design Considerations Plan Plan EE Savings Design ROI Impact Preventative ----- ----- <1% Care Health ----- ----- <1% Promotion Eligibility ----- ----- <1% Changes Disease ----- ----- <1% Management CDHP/High <10% $$ $$ Deductible Tele- $$ $$ <10% Medicine $$ $$ <10% Clinics Transparency $$$$ $$$$ >20% Tools 35

Employer’s Perspective Transparency Why How Learning's 36

Why Quality and Pricing Transparency  Literally Can Save a Life  Achieve Significantly Better Health Outcomes  Save Significant Health Care Resources for the Patient and Plan Sponsor  Will Transform Healthcare Delivery  Patients Will Demand It  Patient Engagement and Satisfaction Increase 37

Why a 3rd Party Solution  Employee’s do not Trust Health Plans (still considered Managed Care)  Employee’s do not Trust the Employer (with Health Information)  Medical Providers Do not Trust the Health Plans or Employers  Independence to Cut Across Multiple Plans  Think “Consumer Reports” 38

Transparency Buyer Beware Open the Hood Kick the Tires  Huge Differences  Consider Trustworthiness  Consider Consumer Usefulness  Consider Independence  Patient Advocacy  Consistency Across Plans  Much More than a Medical ROI  Credible and Proven ROI 39

How To Do It 5 best practices for employee engagement 1. Maximize incentives: Design and promote creative, cost-effective incentives through repeated communications 2. Leverage digital: Use a robust, multi-media digital promotion strategy 3. Develop a ground game: Use on-the-ground recruitment strategies and advocates at all levels of your organization 4. Find the right messenger: Involve leadership and supporting employee testimonials to build program credibility 5. Reach the family: Drive spouse engagement to address potential gender gaps 40

Consumer Engagement Holy Grail Critical Ingredients: Patient Advocacy Trusted Adviser Quality not Cost Leverage Smart Devices Include Human Touch Prospective Analytics Personalized Outreach One Stop Shopping 41

Questions?

Quantum Leap: How Data Driven Transparency Elevates Your Benefits Game Meredyth C. Brown Manager U.S. Wellbeing Programs 05/25/2016

Overview – Travelport Leading Travel Commerce Platform Employee Demographics • Service $8 trillion global travel and • 3,500 employees worldwide tourism industry • 1,500 eligible users in US • - B2B – connects travel providers with 42% female | 58% male travel agencies and buyers - Average age: 51 years old • Tech -savvy population Travelport Medical Plan • Self-insured • PPO and HDHP plans offered